A bounce on Wall Street, despite Fed comments on the taper, was enough to set a positive tone in a albeit thin volume day. In the end we saw a low of 5448 and closed near its highs at 5464 up 12 points We also saw jobs numbers and Chinese export numbers which trailed estimates and pointed to a stable Chinese economy at best. The big focus seem to be on the new PM Clive Palmer as he tries to get his agenda through the Senate. More secret deals with minor parties than Julia. The other big theme seems to be the resurgence of the small and micro-cap resource stocks. After a tax loss induced coma there seems to be much life in the old dogs. Any mention of todays’ hot commodities Graphite or now Vanadium is greeted with the thundering herd chasing very hard indeed. These bulls were further stoked by media reports that Glencore have run the slide rule(who remembers these babies?) over Syrah Resources Limited (A$5.49, +28.0%).#CSE# was also bid higher as they own nearly 7% of Syrah.
In the rest of the market, financials were mixed with National Australia Bank Limited (A$33.39, +0.4%) better but the other three easier ,Insurers slid slightly as did money managers. #SCG# had a great day today following broker upgrades however the real fun and games seems to be in the resource stocks, BHP Billiton Limited (A$37.41, +0.4%),RIO Tinto Limited (A$62.41, +0.4%),Newcrest Mining Limited (A$11.24, +3.6%),Sims Metal Management Limited (A$10.05, +1.6%) and some of the golds did well Northern Star Resources Ltd (A$1.58, +5.0%) hitting close to record highs, Kingsgate Consolidated Limited (A$0.95, +3.3%) got a new CEO and Resolute Mining Limited (A$0.635, +1.6%),Regis Resources Limited (A$1.85, +3.9%) and St Barbara Limited (A$0.115, unch) all looking hot.
Industrials were flatish with Navitas Limited (A$5.15, +6.0%) bouncing after yesterday’s disaster ,consumer stocks slightly better taking encouragement from the steady jobs figures.Gaming stocks for the same reason with energy stocks also higher.
Wearing a pink jersey today were Syrah Resources Limited (A$5.49, +28.0%),Karoon Gas Australia Limited (A$3.23, +6.6%)<,Navitas Limited (A$5.15, +6.0%),Breville Group Limited (A$7.98, +4.6%),Northern Star Resources Ltd (A$1.58, +5.0%),Evolution Mining Limited (A$0.825, +5.1%),Csr Limited (A$3.66, +3.1%) whilst in the smalls were #FTH#,Mirabela Nickel Limited (A$0.175, +12.9%),#TNG# and #TON#. Even #TPN# bounced after its horror debut yesterday. Following Froome lead were Atlas Iron Limited (A$0.62, -5.3%),New Hope Corporation Limited (A$2.59, -3.4%),Arrium Limited (A$0.79, -3.7%),Virgin Australia Holdings Limited (A$0.415, -1.2%),#NEC#,G8 Education Limited (A$4.54, -1.3%) and in the small end Silex Systems Limited (A$0.90, -4.8%),Otto Energy Limited (A$0.095, -5.0%),#MNW# and Helloworld Limited (A$0.25, -3.8%). Volume was anaemic again, not enough to stir a super model at $3bn.
Asian markets mixed Tokyo down 0.22% HK up 0.35% and China up a James Bond. The Aussie dollar was 94cents,Digital tulips $659 and the shiny stuff $1329, close to a four month high.
Stocks and Stories
Syrah Resources Limited (A$5.49, +28.0%) and #CSE# the punters are back. Volatilty is back! Risk is back. Rumours were of a $2bn approach but the companies announced late this afternoon that nothing was in concrete and may be a bit ahead of itself. Stock fell back to $4.90 before another massive rally. Smoke and fire anyone?
TABCORP Holdings Limited (A$3.36, +0.3%) today lodeged an appeal in the Victirian Suoper Supreme court against the recent judgement relating to their $700m claim when their licences expired in 2012.
Atlas Iron Limited (A$0.62, -5.3%) shipped a record 10.9mt to beat its FY14 guidance. Record 3.1mt for the June quarter unfortunately didn’t help the share price much though.
Csr Limited (A$3.66, +3.1%) AGM today and cautious optimism on it Viridian Glass business and lots of back slapping for its building products division as the building boom continues and underpins their result.
Fairfax Media Limited (A$0.94, +3.3%) bought a business called Allhome.com.au for $50m.Bam!Must be a key plank in their real estate strategy to pay that much. Maybe they should look at #OTH# which today announced that Westpac Banking Corporation (A$33.75, -0.3%) have deepened their advertising partnership for the next 12 momths.
This one is a good guide to economic activity. Transurban Group (A$7.58, +0.4%) toll revenue for the financial year rose by 13 per cent on the previous year, with its Sydney network delivering strong traffic growth. For the June quarter, the company said that toll revenue was up 13.1 per cent at $234.1 million on the previous year and proportional revenue for the quarter was up 11.8 per cent at $286.7 million.
June unemployment rate 6 per cent; May unemployment rate revised to 5.9 per cent from 5.8 per cent. An increase of 19,700 in part-time workers was partly offset by a decline of 3800 in full-time posts. Rate cuts? Nah!
Chinese exports rose 7.2 per cent in June, recovering from a drop in May. Imports rose 5.5 per cent, leaving a US31.6 billion trade surplus. Analysts had expected a 6 per cent gain.
Tomorrows News Today
While PM Abe is having his picture taken with our Tony, things at home aren’t all sweetness and light as core machinery orders, considered a leading indicator of overall capital spending, fell by 19.5 per cent in May compared with April, the government said on Thursday. This was the biggest fall since 2005 and comes after a massive ramp up due to the sales tax increase. The previous month was a shocker too and this month was supposed to rebound. Not.
The Fed said last night that by October they will no longer be pumping in money to the system. They are attempting to pull the table cloth out from under the dishes without upsetting the china and the glassware. Now in my experience this takes practice. It can get messy for those doing it for the first time and I feel sure they are hoping that no one will notice if they keep talking about low rates forever.
Bentley has said it is on track for record-breaking sales in 2014, after soaring demand in China and the Middle East for its gas-guzzling limos.Bentley Motors, based in Crewe but owned by German manufacturer Volkswagen, said it had delivered 5,254 cars in the first six months of the year, a 23% increase on last year.
And in worrying news AC/DC guitarist Malcolm Young is back in hospital. Get well soon.
Not sure Abbott’s pledge to refuse to talk to minorities is really working out for him! Maybe tomorrow they will get the carbon tax repeal through. Maybe not. I remember Bill Shorten. Sure he used to do something. Maybe he has a career in the private sector like ex union boss Paul Howes.
That is all